Smart steps in renting an apartmentAs college students graduate, many will take the monumental step of renting their first apartment. The Minnesota Society of CPAs (MNCPA) offers some advice on getting the right start.
As college students graduate, many will take the monumental step of renting their first apartment. The Minnesota Society of CPAs (MNCPA) offers some advice on getting the right start.
Create a budget
A personal budget is a must because it helps you maintain control over how your money is spent and makes it possible to manage finances wisely.
Before you begin your apartment search, it’s important to know how much rent you can afford. Add up how much you expect to earn – after taxes are deducted from your paycheck – each month. Now, make a list of your expected expenses, such as phone, cable and Internet bills, auto loans or commuting costs, groceries, student loan payments and other regular monthly bills. Once you’ve added up all these necessities, deduct that amount from your monthly earnings. Given what’s left, consider how much you can spend on rent.
It’s a smart idea to look at several apartments in different neighborhoods in order to understand what’s available in your price range. Don’t be swayed by a persuasive advertisement that promises a dream apartment. Check out each option to see if you would feel comfortable living in the area and if the building is well kept and suits your needs.
Read the lease
The lease is a formal legal document, so be sure you understand what you’re agreeing to when you sign. Don’t sign a three-year lease if you expect to relocate soon, since you will be responsible for the rent for the entire lease term. If you have pets, make sure the lease does not prohibit them. If you plan to have a roommate, make sure there are no restrictions on apartment sharing.
In general, get a good sense of the lease’s requirements and limitations and be sure they are in sync with your plans.
Be aware of
Rent is not the only expense associated with a new apartment. Your landlord may also ask for a security deposit, usually about one month’s rent, that is held until you move out. If a realtor finds the apartment for you, he may charge a fee. Find out whether the rent includes utilities, such as water, electricity and heat, or if you have to pay for those separately.
Look into renter’s
Renter’s insurance will reimburse you for items stolen from your apartment or for damages to possessions in case of a fire, flood or other disaster. Although it means an added monthly expense, without this insurance you will have to pay to replace belongings from your own pocket, so it’s well worth considering.
Consult your CPA
The CPA profession’s Feed the Pig campaign was created to help Americans make better financial choices.
For more information on how to manage your money, check out the program’s website at www.feedthepig.com.
Information and resources are available to the public on the MNCPA website www.mncpa.
org/information and at MyTaxTime.com including tax and financial planning information for individuals and small businesses. A free CPA referral service is also available on the website or by calling 1-800-331-4288. The MNCPA is part of the national 360 Degrees of Financial Literacy campaign to help Americans improve financial literacy; information and resources are available at www.